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The software company NIIT Technologies is confident of surpassing National Association of Software and Services Companies’ (NASSCOM) growth forecast for the current financial year buoyed by large order wins.
Software company NIIT Technologies is confident of surpassing National Association of Software and Services Companies’ (Nasscom) growth forecast for the current financial year buoyed by large order wins, Arvind Mehrotra, President - Asia Pacific, NIIT Tech told CNBC-TV18. The industry body expects the IT industry to grow at 12-14 percent in 2013-14.
The Noida-based company recently won two large orders from Airport Authority of India and Andhra Pradesh finance department. On Thursday, the company won a multiyear order worth Rs 344 crore from Airport Authority of India for integration of IT systems at the operations control centres of 10 airports in India. The contract will offer the company margins equal to its international operation. The company had recorded 15.8 percent operating margins during the quarter ended December.
On April 22, NIIT Technologies had won an order worth Rs 185 crore from finance department of Andhra Pradesh state government for setting up a comprehensive financial management system. With these new contracts, the company also sees an improvement in margins in the current financial year.
Below is the verbatim transcript of the interview.
Q: You have won deals from Andhra Pradesh government and Airport Authority of India (AAI). Can you take us through these two orders? What will they yield in terms of margins both of them being semi-government bodies?
A: AAI deal is a multi-airport implementation of the Airport Management System and Resource Management System. This is to help to modernize and improve the customer’s service, optimize the resources that are deployed at the airport and establish a Single Version Of Truth (SVOT) and a common interface for all the stakeholders that work at the airport which includes custom, security, people at the gate etc.
Q: What does it yield by way of margins?
A: The AAI deal will give us margins equal to our international operations. This will be the first time a multi airport system is implemented in Asia. We are working with SITA, one of our customer, they are delivering the core system along with us.
Q: What has been the total order intake in the January-March quarter and separately in the month of April as well? What is the run rate that we could expect?
A: We have still not announced the results. We will be announcing our results on 17th. So I will have to hold that information till that point in time, but we have already announced the two big deals which is the AAI and the Andhra Pradesh Finance, that is in excess of Rs 550 crore.
Q: Would the National Association of Software and Services Companies (NASSCOM) targets be surpassed by your company in FY14?
A: We are quite confident that we will surpass the NASSCOM numbers.
Q: Are you chasing any new orders? Are you in the process of closing out any more orders?
A: Yes we are chasing large deals in the region and as and when we close out and sign the contracts we will be in the position to announce them.
Q: What is the margin trajectory? Would you do in FY14 a percentage point above what you did in FY13?
A: With deals like AAI we should see an improvement in our margins.
NIIT Tech stock price
On April 17, 2014, NIIT Technologies closed at Rs 411.15, up Rs 10.15, or 2.53 percent. The 52-week high of the share was Rs 477.00 and the 52-week low was Rs 234.25.
The company's trailing 12-month (TTM) EPS was at Rs 36.81 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 11.17. The latest book value of the company is Rs 126.58 per share. At current value, the price-to-book value of the company is 3.25.
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